It’s inevitable that your parents will age, and most senior adults will eventually end up needing professional care. Even the healthiest seniors run the risk of falling, forgetting to take medications, maintaining nutrition and other challenges that come along with living alone.
To alleviate these challenges, many families will need to make the decision to look to an outside source for assistance with care. Unfortunately, while this may be an ideal decision for your parents, it can be a source of great personal and financial stress if you’re unprepared. The first step in planning is to know what your options are to make the best choice.
Assisted-living facilities: If your parent is generally in good health, but requires assistance for day-to-day tasks, an assisted living facility may give them the freedom to retain their independence while providing them with help throughout the day to avoid accidents.
Nursing home facilities: A nursing home facility is often considered when a parent requires 24-hour supervision, especially if they have been diagnosed with dementia or memory impairment becomes an issue. These facilities have the added benefit of providing a built-in community to decrease depression due to social isolation.
In-home caregiving: Sometimes it’s best for your parent to stay in familiar surroundings and their normal routine by hiring a professional to come into their home. In-home caregivers can be hired for scheduled daily shifts or live in the home 24 hours a day. While this is often an ideal solution, it can also be the costliest.
Whatever you end up deciding is the best option for your parent, it is going to come at a cost, and probably a large one. Many families do not have a plan in place and paying for care can put a financial burden on them.
A Home Equity Conversion Mortgage (HECM loan) may be able to provide the cushion that your family needs to be able to afford professional care for your loved ones. These are loans designed to assist homeowners in trading a piece of their equity for cash. Essentially, instead of borrowers making payments to lenders, lenders are the ones making payments to borrowers. The loan is then repaid once the homeowner sells the property or leaves it to family members. Funds can be withdrawn on a flexible schedule determined by the borrower.
I’d love to talk to you about HECM loans, and help you decide if this may be the right solution for your family. Don’t hesitate to reach out!
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.